More on Agglomerations

So, the other day I jokingly twittered (normally, my twitters are dead serious) that a bunch of us new media types should pack up and head to Detroit, where we could all buy mansions for $1000. A friend responded by suggesting some analysis would be necessary before we all up and make the leap. Fair enough.

The idea is this — if enough people of a certain productive potential move to Detroit, then Detroit will begin exercising an attractive force. In response to the growing population of people, supportive infrastructure will grow up. Employers will follow or start-up from among the migrants. Consumption options reflecting migrant taste will appear. And eventually the whole show will become self-sustaining. People who want to be in the industry involved or related industries will move there, employers who want to employ such people will move there, and so on and so forth.

The question is, how many people have to move before growth becomes self-sustaining? The actual answer for Detroit would be unique, since some people in the particular industry already live there. If properly concentrated and supported, the number of necessary migrants might not be all that much. (On the other hand, Detroit has plenty of negative amenities). So let’s take a different case; what if we were starting from scratch? What if I bought a few hundred acres of empty land close, but not too close, to a major urban corridor (say about 200 miles), created a street grid, and started building homes. How many folks would I have to convince, or bribe, to come before the whole thing took off, making me a tidy real estate profit?

Well, that depends. In certain rare cases, a very low population will suffice. Should the first few recruits succeed in creating a famous artist colony, then we could probably get by with only 5,000 or so people. Similarly, should I manage to open up a university of sufficient quality and amenities, then we could probably make it with anywhere from 10,000 to 50,000 people. Same goes given a unique natural attraction. But if we’re hoping to create a true industry center, either tech or media oriented, or both, then the necessary population of professionals is probably much higher — I’d guess at least 100,000.

Why so many? Well, if all we needed were the brains of the operation, then it wouldn’t be that large, but cities are complicated economic ecosystems. The professionals will want to go out to enjoy themselves, which means we’ll need entrepreneurs to open and run bars and restaurants, and a large enough urban population to keep a small but diverse array of establishments open and profitable. People need accountants and banks, doctors and teachers, lawyers and public servants. Cities need plumbers and janitors and sanitation workers and tailors and dry-cleaners and pharmacists and electricians. And if you want more and better options — theaters and music venues, museums, specialty shops, and so on, then you need a bigger population.

Again, you can get by with less under special circumstances — if the migrants are happy with discount options or are interested in simplicity or a DIY ethos (or if you have a bunch of government scientists who never want to leave the lab) — but such characteristics alone won’t generate self-sustaining growth. Most folks are interested in convenience and options, and that means a bigger population. I’m guessing here, but looking at a few metropolitan examples it seems like the sweet spot is a total population between 200,000 and 500,000, most of which will wind up being service professionals supporting the “town industry.” Better planning will likely reduce the number. In a denser environment, more people have access to more places, increasing the likelihood that a larger number of businesses (and a more diverse array of businesses) is able to survive.

So it’s not clear that my plan could work without some serious sponsorship. But still, while our little unsustainable community lasted, we’d all have cheap mansions. And easy access to Canada.

Comments

I think you might be underestimating the extent to which it sucks to live in a place that economically depressed. My folks are there, and it is really hard to maintain any kind of optimism about the U.S. economy, which makes going to work a real grind (and my dad has a really good, secure job).

The traffic is non-existent, though (if you can stand the roads).

And you’ve never seen a place more opposed to mass transit (including all the Sunbelt cities combined).

But, hey, if it doesn’t work out, you didn’t really lose much. As Yglesias pointed out when we were ogling Detroit mansions one time but worrying about the resale value, one could move to Detroit, buy a $10,000 mansion, live in it for one year, and at the end throw a party so awesome that you burnt it down and still save money compared to our annual DC rents.

“Again, you can get by with less under special circumstances â€” if the migrants are happy with discount options or are interested in simplicity or a DIY ethos (or if you have a bunch of government scientists who never want to leave the lab) â€” but such characteristics alone wonâ€™t generate self-sustaining growth.”

Los Alamos grew around the nuclear weapons lab there. Not surprisingly, it has the best educated citizens in New Mexico. But Los Alamos has only 13,000 residents, which suggests that a one-company town — even though a true research center — can remain pretty small.

Of course, labs like Las Alamos are supposed to be super-secret, with information tightly compartmentalized. This reduces the increasing returns to knowledge from packing a lot of smart people in a small area. (This is one reason the government puts labs like this in remote areas in the first place.) My guess is that without all the secrecy, Los Alamos would have grown much bigger and become a more important agglomeration.

I propose that in Detroit it may take just one: A leader who can articulate an unselfish set of principlesâ€”whether civic or corporateâ€”and provide a vision that will rally, unite and motivate the very many still here who have cared but have been unable to break through a wall of self-centered power.

I reinforce Jim’s comment. There’s a strong community here in Detroit that believes we have great assets and a lot to build on. We’re not interested in people coming here to “throw a party and burn down our city.” We’re not interested in those kind of newcomers. Come to the D if you’re interested in an authentic urban “small town” where neighborhoods are really communities and we take the time to care about each other and invest.

Boosterism isn’t going to help, though. You may believe you have great assets and a lot to build on and all you need is a leader with vision, but right now, no-one wants to live in Detroit. When houses are on offer in the low four figures, that’s a price signal: there’s essentially no demand.

And don’t deride the desire to throw great parties. Hipsters came to Williamsburg because rents were low enough that they could get enough space to do whatever they wanted to do on the tiny incomes they could muster (a little from inherited money — not very much inherited money — a little from selling an occasional piece) and give great parties, too.

But they also came to Williamsburg because they could get around without cars. The L train may have been the grungiest line in the city, but it was a lifeline. On the tiny incomes that many, maybe most hipsters had, running a car was out of the question.

check out Austin. It is a completely bootstrapped town. Austin never had old Texas money (cattle and oil or manufacturing)

Instead it established a music scene in the 70s, later a film (90s) and now gaming and art scene, surrounded with an infrastructure of venues, progressive banks, boostering local press. There was a strategy for creating a culturally strong community that attracts corporations.

three more ingredients:

- from day one Austin had a progressive streak (German settlers opposed slavery)

- state jobs and the University of Texas (research university) jobs helped

- there is a creative, supportive environment to bootstrap ideas

Detroit can become very attractive if a critical mass of artists and architects show up and produce work that cannot be produced in other cities…